- The term "Skunkworks" refers to a unit of a company
set up explicitly to encourage exceptional creativity
and the pursuit of new ideas.
Located some distance from corporate headquarters,
the unit takes a group of people
away from their regular work environment
and gives them freedom to pursue radical innovations.
During World War II, Lockheed Martin
used the Skunkworks approach
to develop high-speed fighter planes
to help the allies win the war.
In the late 1970s, IBM used the Skunkworks approach
to allow some workers to break away
from the company's mainframe mindset
and launch the PC in record time.
For many years, the IBM PC remained
the most successful response to Apple's computers.
Amazon's Lab126, located in Silicon Valley,
away from corporate headquarters in Seattle,
provides a recent Skunkworks example.
It's charged with designing and engineering
high-profile consumer electronic devices.
A slew of extremely successful products
like Kindle e-readers, Amazon Fire TV,
and Amazon Echo all emerged from Lab126.
The Skunkworks approach can offer key advantages,
including freedom from the baggage of a legacy mindset,
the ability to pursue high-risk projects
that are likely to pay off
in the longer, rather than shorter, term,
and support from senior-most corporate leaders.
Yet, Skunkworks have had a mixed record.
Sometimes it's poor design or poor implementation,
or leaders fail to give Skunkworks
the autonomy they require.
Or they populate the projects with people
who lack the right mindset or needed capabilities.
Or they expect the results to be too grand
and to happen too soon.
Even when the Skunkworks are well thought through,
their advantages can come with negative side effects.
For example, they may be unable
to leverage the technical, operational,
or marketing strengths of the rest of the company.
In the 1970s, Palo Alto Research Center,
located 3,000 miles away from parent Xerox Corporation,
developed most of the technologies
that went into what would become Apple's Macintosh.
Yet, Park hardly received any support from Xerox.
Imagine what Xerox could have been.
Or they may be viewed with suspicion,
increasing the risk that later on,
it may be impossible to integrate the project
back into the existing business.
Or top leaders may start looking at Skunkworks
as the only path to glory,
sometimes weakening innovation
within the core business units.
Learning from their own and others' experiences,
seasoned innovators such as Google, Amazon, and others,
have come up with the following guidelines
about how to capture the benefits of Skunkworks
while minimizing the toxic side effects.
First, bring a portfolio mindset
to your company's innovation agenda.
Moonshots serve only one type of purpose.
To borrow a term from Google, you also need "roofshots."
Innovation needs to be viewed along a spectrum
rather than in binary terms.
While moonshots would aim for innovations
that disrupt the industry,
roofshots would aim for those
that lead to incremental improvements
in existing products and services.
The entire spectrum is critical but in different ways.
Moonshots should not distract from roofshots,
and vice versa.
Second, use appropriately tailored processes
to pursue the different innovation programs.
These programs may include not just Skunkworks
but also corporate venture capital units,
accelerators and incubators
in areas closely related to your company's businesses.
Moonshot projects should be given a high degree
of autonomy and staffed by freedom-craving pioneers.
They should be managed in a high-risk, high-reward manner
and overseen directly from the corporate center.
At the other end, roofshot projects should be embedded
within existing business units.
Finally, maintain transparency
about your various innovation programs.
Other than the caveat of protecting information
that could benefit competitors,
secrecy within a company breeds suspicion
and prevents various projects
from benefiting from corporate strengths.
Give everybody the option to be considered
for any innovation project.
Groundbreaking ideas can come from anywhere.
Creating a friction-free internal market for labor
helps the right talent find the right home more easily
and benefits everyone in the company.